Tennessee may hold onto its top-notch credit rating even if the federal government gets a downgrade, state officials said Friday after meeting with Wall Street rating agencies
Comptroller Justin Wilson said the firms that rate government debt this week told state officials specifically that Tennessee would not see its creditworthiness reduced automatically if the United States government's were taken down, a shift from past conversations.
That means Tennessee could maintain its AAA rating from Fitch Ratings and Moody's Investors Services and AA+ from Standard & Poor's.
Tennessee's credit rating helps determine how much interest state and local governments must pay when they borrow money to fund projects such as new schools and roads. State officials have worked for decades to improve the state's rating and finally reached the top tier in 2010.
Gov. Bill Haslam said during a conference call from New York, where state officials are making their annual visit to the ratings agencies, that Wall Street appeared to be more concerned that cuts in federal spending could put a drag on Tennessee's economy.
Bond raters told Tennessee officials that this month's partial federal shutdown, this week's showdown over raising the debt ceiling and the nation's rising debt have created uncertainty in the financial markets. But they praised Tennessee for keeping a tight rein on its borrowing and revamping its pensions for state workers earlier this year, Haslam said.
"This was definitely the most positive feedback I've gotten," Haslam said.
The agencies will update their ratings on Tennessee's bonds later this year.